The Ultimate Guide to Credit Score and Repair Services

Posted by Nikitas Tsoukalis on August 4, 2017

The Ultimate Guide to Credit Score and Repair Services

Introduction

Numerous questions come to your mind when you think of credit score. A cleanup credit report is all you need, but the lack of knowledge about the same is one of the hindrances that can lead you to poor credit score.

Components of Credit:

Before you understand credit repair, you need to understand the elements of the credit score. The FICO model of credit score is vastly used by the majority of the banks and credit providers. As per FICO model, the credit score is made up of 5 components which are as below.

1. Payment History

Your payment history has the highest impact on your credit report as 35 % of your score is made up of history. You should make sure to pay your bills timely to maintain a favorable history.

2. Debt Burden

Another essential component is debt burden that possesses 30 % of your credit score. The debt burden in simple terms can be referred as the credit utilization, that is the percentage of available credit that has been borrowed.

3. Length of Credit History

The length of credit history is made up of two factors, one the time each account had been opened and the length of time since the account’s most recent action. It has the stake of 15 % on your credit score.

4. Types of Credit

Your credit mix forms 10 % of your credit score. Opening too many credit lines at the same time may seem that you are in need of credit that can affect your credit mix unfavorably.

5. New Credit

Your inquiry for credit, the application for new credit or the new accounts make up the last component that has 10 % stake on your credit score.

What Is Credit Repair?

As you have understood the components of the credit score very well; to understand the credit repair shall become easier for you. In simple terms, credit repair is an improvement of your credit report by fixing the bad credit and resorting to such techniques that enhance the credit score.

How Does The Credit Repair Work?

The credit repair companies analyze client’s report and with the help of techniques and other resorts improves the same. For instance, if you have a collection account at different debt collectors, your credit report shall mention multiple times.

The same even being accurate information as well impairs your credit score. The credit repair companies make sure that your report is correct, entirely fair and thoroughly substantial.

In particular cases, the credit repair companies communicate with the creditors to resolve the disputes and remove the same from the report.

Concluding Remarks

Herewith you know the components of credit score, how the credit repair works and whether you should consult the credit repair agency or not. To boost your credit score, make sure to maintain a good history and ask the professionals who can take care of your accounts very well.